REG - Empyrean Energy PLC - Duyung PSC Update

Empyrean EnergyAnnouncement

31/01/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240131:nRSe5018Ba&default-theme=true

RNS Number : 5018B  Empyrean Energy PLC  31 January 2024

This announcement contains inside information

 

Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil & Gas

 

Empyrean Energy plc

 

Duyung PSC Update

 

31 January 2024

 

Empyrean Energy plc ("Empyrean" or the "Company"), the oil and gas development
company with interests in China, Indonesia and the United States, notes the
announcement released by Conrad Asia Energy Ltd ("Conrad" or the "Operator"),
the holder of a 76.5% operated interest in the Duyung PSC, offshore Indonesia,
in which Empyrean has an 8.5% interest.

 

In its announcement, the Operator provided an update in respect of, inter
alia, activities in respect of the Mako gas development project ("Mako
project")within the Duyung PSC during the quarter ended 31 December 2023. In
doing so providing an update on the expected capital costs of the Mako project
and associated project timings.

 

An extract of the Operator's announcement in respect of Duyung PSC
developments is set out below.

 

•              Considerable progress has been made in maturing
the Mako project during the past months. The key developments include:

 

•              Front end engineering design ("FEED") studies
for the Mako development project have concluded. Based on these studies (and
the procurement process to date), capital costs for Phase 1 are currently
estimated to be US$325 million based on a 100% participating interest, in line
with market trends. Capital expenditures to initial revenues are currently
estimated to be US$250 million (100%). Project costs and expenditure
scheduling are being further optimised to reduce this amount. The planned
development wells are targeted to deliver 120 mmscfd (100%) for a plateau
period of seven years.

 

•              In Q3 2023, the Company signed a non-binding
term sheet (the "Term Sheet") with Sembcorp Gas Pte Ltd ("Sembcorp"), a major
Singapore energy company, which outlines the core terms and serves as the
basis for negotiating a definitive Gas Sales Agreement ("GSA"). Subsequent
commercial negotiation between the Minister of Mining and Natural Resources
and Sembcorp has resulted in both improved price formula and a delay in
executing the GSA, and accordingly, Conrad has agreed with Sembcorp to delay
the deadline to finalise a binding GSA (which will be subject to customary
conditions precedent) by the end of Q2 2024.

 

•              During the quarter, Conrad progressed the
technical and commercial work with the West Natuna Transportation System
("WNTS") Joint Venture and with the support of SKK Migas to negotiate the
commercial and legal terms of access to the WNTS for the transportation of the
Mako gas to Singapore. Despite the good progress, delays have been encountered
and this has required a revision of the project timeline and finalisation of
the GSA.

 

•              While the Company continues to strive to reach a
Mako final investment decision ("FID") at the earliest, on the current
trajectory of conclusion of the GSA and gas transportation agreement, FID
would be delayed until mid-2024. Production start-up would commensurately slip
until mid-2026.

 

•              The  Conrad  Duyung farm down process is
progressing. With the announcement of the Term Sheet, as well as progress on
all other facets of the project, more parties have expressed interest in the
Mako project. The Company is engaging in confidential discussions with
potential partners regarding acquisition of a Participating Interest in the
Duyung PSC.

 

•              Conrad has appointed a financial advisor to
assist with the debt funding portion of its share of the Mako project capital
cost. Conrad has received an indicative term-sheet from one of the potential
lenders to help fund Conrad's share of project costs. Lender selection and
completion of documentation are expected by mid-2024.

 

Empyrean holds an 8.5% Participating Interest in the Duyung PSC, WNEL (76.5%
Participating Interest) and Coro Energy Duyung (Singapore) Pte. Ltd (part of
London AIM-listed Coro Energy Ltd, 15% Participating Interest)

 

Empyrean CEO, Tom Kelly, stated:

 

"A further improved gas pricing formula and the potential for further
optimisation of capital expenditures to reduce the capital required before
first production helps to improve the already robust economics of the Mako
project. These developments are seen as both positive and essential to
attracting a JV partner in Conrad's sell down process."

 

 

For further information please contact the following:

 

 Empyrean Energy plc
 Tom Kelly                   Tel: +61 6146 5325

 Cavendish Capital Markets Limited  (Nominated Advisor and Broker)
 Neil McDonald               Tel: +44 (0) 20 7297 8900

 Pearl Kellie

 First Equity (Join Broker)
 Jason Robertson             Tel: +44 (0) 20 7330 1883

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDGLGDBXDXDGSB